Jon/Tadhg - I find myself continuing to disagree in many many ways. Firstly @Jon:
I've played both your games that are easy to find (I'm not sure if you have released more than that). Your games are rated well, but conversely don't get a lot of plays. You aren't licensed (to my knowledge) and don't maintain a solid web presence and you rarely talk to your fan base on portals. With all this, you are what I consider a hobbyist dev (something you yourself admit to on your Kong page).
I'll disregard your belief that you are in the top 1% of Indie Game Developers (Revenue) as I would need to spend a week gathering the various statistics to prove you wrong, and I'd rather add to the flavor of the article than detract.
Let's talk numbers for a bit. You say you have got about $3.70 an hour with your best game. I know that Tile Factory got you $500 from ArmorGames, and probably got you another $500 from Kongregate (if you bothered to implement their API).
From that we are already at 270 hours of sweat equity, or nearly 8 weeks of full 9-5 mon-fri work. I'm only mentioning one portal, but you are present on bubble box and others, so I imagine you were in the running for their development prizes also. Also this isn't adding up any ad revenue you have made since.
We're talking work here - not 'do a bit of code' 'check facebook' 'check twitter' 'play minecraft' 'code a bit more'.
Did it really take you that long to build Tile Factory? Especially considering the competition requirements and the fact that you also work? If so - wow, you showed a lot of dedication there matey!
The flash game business is driven by advertising, but if you play your cards right, advertising can be a seriously small portion of your overall revenue.
You say you can't make a living doing it, but once again I disagree. Lets give you an example - undefined is a two man studio who have been putting out games now since 2008. They are by all intents and purposes a 'normal' development studio. See them here http://protectorworld.com/
Their first game, Defender, took them just over a month of typical 'man hours' (x2 of course) and earnt them decent amounts of cash. They continued from there to create the Protector series, with each game taking about the same amount of man hours - but gaining incrementally more success.
This is not a huge success story, they haven't done 'brilliantly well' in the field, yet they have manged to create a series of games that has given them well over that of a full time wage, in the tune of well into the 6 digits.
Are they successful? Absolutely. Did they start with nothing? Absolutely.
@Tadhg You say that maybe 1 game a year breaks out that way. I don't know that I agree with that. Most flash developers *much like Jonathon above* don't maintain an active presence on the web. They aren't 'public' about their success stories.
My work in journalism has made it so that I have to hunt these guys down and try to wrangle stats and figures and stories and more out of them - and it's often not an easy task.
When I say that Fantastic Contraptions success is one that has happened dozens of times this year alone in the flash scene, I really do mean that. The only reason you don't hear about it more and more often is twofold:
1 - Many of these people are reclusive. Take undefined for instance, scouring websites and blogs they don't make effort to talk about their success, and they are one of the more public figures in the flash world.
2 - They don't want to spoil a good thing. I've interviewed developers who worry that by being so open about their successes, feel that it will bring a lot of triple A publishers to the world of flash (and for good reason - Every time a success story is aired, another big studio decides to try and step in and take a share of the profits)
It's just the way the world works - Yes, I cited Meat Boy and FC and more, but that is due to the fact that I know you will know what the heck I'm talking about when I say them.
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Finally, I think that the differences in success here are where the problem between our two views lie. If I see two 'starving artists' so to speak pull more than they could working full time? Then that's a success.
If I see a small group grab 400k + on a game, that's a great success.
If I see a medium group grab well in excess of $1m like dream world (You've probably never heard of this flash turned facebook game) it's a success.
And for most, if not all of these successes? They started with far less than 100k.

Probably the single biggest thing that stands between the idea of making a great game and the reality of actually doing it is the cost. Even with agile practices in place, games need a certain level of development before they start to show their potential. The game actions need to extend, the ...